A New Day! Compensation Plan F.A.Q. (May 2016)

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1 A New Day! Compensation Plan F.A.Q. (May 2016) 1. What is the Product Introduction Commission? Effective May 1, 2016, the Product Introduction Commission replaces the Home Conversion Commission. Marketing Executives earn a 50% commission on the first 150 Product Points purchased by their new personal Enrollee in their first month of enrollment (excluding Select Packs and Back-up Orders). Note: For May 2016, the $100 commission for the purchase of a Home Conversion Pack will be paid. Additionally, for the month of May, A Marketing Executive will receive the greater of 50% of the Product Points purchased in a new Customer s first month OR $25. Note: Organization Commissions and Personal Customer Commissions are not paid on purchases made in a customer s first month of enrollment. 2. What are the maximum Organization Commissions a Marketing Executive can earn? The number of generations that commissions are paid on and the maximum Organization Commissions available are determined by a Marketing Executive s Commission Rate (Status). Commission Rate (Status) Generations eligible to be paid Maximum Organization Commission available each month Product Advocate 2 $25 Product Advocate 2 3 $50 Product Advocate 3 4 $75 Director 7 $250 Director 2 7 $375 Director 3 7 $500 Director 4 7 $750 Director 5 7 $1,000 Director 6 7 $1,250 Director 7 7 $1,500 Director 8 7 $1,750 Director 9 7 $2,000 Senior Director 7 $3,000 Senior Director 2 7 $3,500 Senior Director 3 7 $4,000 Senior Director 4 7 $4,500 Senior Director 5 7 $5,000 Senior Director 6 7 $5,500 Senior Director 7 7 $6,000 Senior Director 8 7 $6,500 Senior Director 9 7 $7,000 Executive Director and Above 7 UNLIMITED 1

2 3. How do I get paid on Presentation Points? When a Marketing Executive with a Commission Rate of Director 5 or above earns more than 10 Presentation Points in any given month, they will receive $5 for every Presentation Point after the first 10 that month. Presentation Points are awarded on presentations done both within and outside of your organization. 4. Is there a maximum amount that I can earn on Presentation Commissions? No. There is no maximum on Presentation Commissions. 5. What is the Five-Month Presentation Retention Index, and how is it calculated? The Five-Month Presentation Retention Index measures the percentage of Preferred Customers to whom you presented Melaleuca: An Overview who are still Preferred Customers after five months. A Five-Month Presentation Retention Index of 50% or higher is required in order to earn Presentation Commissions. The example below demonstrates how this is calculated: Your September 5-Month Presentation Retention Index Calculation: Preferred Customer presentations in March Preferred Customer presentations in April Preferred Customer presentations in May 12 Still Preferred after five months (July 31) 8 7 Still Preferred after five months (August 31) 5 10 Still Preferred after five months (Sept. 30) still preferred after five months 29 Preferred Customer Presentations = Five-Month Presentation Index of 62.1% 6. What Leadership Points count toward Status and Bonuses? Leadership Points produced anywhere will count toward Status, Mentoring Bonus, and Growth Bonus requirements. 7. Will I earn Leadership Points when I enroll a customer who was previously enrolled as a Preferred Customer? Leadership Points will not be awarded for the reenrollment of a customer who was previously an active Preferred Customer at any time in the last three years. 2

3 8. Who receives the 10 Leadership Points awarded when a Marketing Executive advances to Director and above? The Marketing Executive in the Support Team who has earned the most Leadership Points in the advancing Marketing Executive s organization during the previous three months will receive the 10 Leadership Points. 9. When are the 10 Leadership Points awarded to the Qualifying Mentor for developing a new Director or above? The 10 Leadership Points awarded to the Qualifying Mentor for developing a new Director or above will be awarded in the month the Director or above is developed. 10. What is the Five-Month Retention Index and how is it calculated? The Five-Month Retention Index measures the percentage of Preferred Customers in your organization that have remained Preferred Customers after five months. Example: Your September Five-Month Retention Index Calculation Preferred Customer enrolled in March 50 Still Preferred after five months (July 31) 29 Preferred Customers enrolled in April 65 Still Preferred after five months (August 31) 37 Preferred Customers enrolled in May 57 Still Preferred after five months (Sept. 30) still preferred after five months 172 Preferred Customer Enrollments = Five-Month Retention Index of 54.7% 11. When are Advancement and Pacesetter bonuses paid, and how does my Five-Month Retention Index affect my advancement bonus? Advancement and Pacesetter Bonuses are paid in the month of advancement and may be prorated based on your Five-Month Retention Index as shown below. Five-Month Retention Index % of Advancement & Pacesetter Bonus Paid 50% or higher 100% 45% % 80% 40% % 70% < 40% 50% In the 12 months following payment, any un-earned portion of the Advancement or Pacesetter Bonus can be earned by increasing the Five-Month Retention Index to 50% or above and growing the number of Preferred Customers in the advancing Marketing Executive s organization by a minimum of one over the Preferred Customer count in the moth of advancement (excluding roll ups and organization moves). 3

4 12. How do I qualify for Pacesetter Bonuses? During the month of May 2016, a Marketing Executive may qualify for the Pacesetter Program by either watching the entire Foundations video OR purchasing a Value Pack or Home Conversion Pack, and advancing within the Pacesetter timeframe, as shown below. Effective June, 1, To qualify for Pacesetter Bonuses, Marketing Executives must watch the entire Foundations video in the month of enrollment or the month following enrollment, and advance in Pacesetter timeframe. Months After Status Enrollment Director 2 Director 2 3 Director 3 4 Director 4 5 Director 5 6 Director 6 7 Director 7 8 Director 8 9 Director 9 10 Senior Director 12 Months After Achieving Senior Status Director Senior Director 2 1 Senior Director 3 2 Senior Director 4 3 Senior Director 5 4 Senior Director 6 5 Senior Director 7 6 Senior Director 8 8 Senior Director If I achieve the necessary volume before the required leadership to advance, can I still advance? Yes. Marketing Executives advancing to Director 3 through National Director 9 Status who had the necessary volume to advance prior to the required leadership will be paid their Advancement/Pacesetter Bonus in thirds. Marketing Executives will be paid one third each month for three months as long as they meet all the requirements in the month the bonus is to be paid. 14. What is the Mentoring Bonus? The Mentoring Bonus rewards you when you help Personal Enrollees advance in Status. You will earn an amount equal to the Advancement or Pacesetter Bonus paid to your Personal Enrollees who advance to Director through Senior Director Status. You will also be paid a Mentoring Bonus ranging from $2,200 to $5,000 each time one of your Personal Enrollees advances to Senior Director 2 through Executive Director. 4

5 15. When is the Mentoring Bonus paid? The Mentoring Bonus is paid in the same month the advancing Personal Enrollee is paid. To receive payment, the Enroller must qualify for the Mentoring Bonus in the month of payment. 16. How do I qualify for the Mentoring Bonus? You qualify for the Mentoring Bonus when you have a three-month Leadership Point average as shown below. You must be at a Commission Rate equal to or higher than your advancing Personal Enrollee, and your advancing Personal Enrollee must advance within two months after achieving the necessary Organization Volume for that Status. Commission Rate (Status) 3-Month Average Leadership Point Production Director & Director 2 1 Director 3 - Director 5 5 Director 6 and Above What is the Core Mentoring Bonus? If you are a Director 3 or above, you can earn the Core Mentoring Bonus when others in your core organization, who are not your personal enrollees, advance from one Status to the next. You earn 50% of the Advancement Bonus on Directors through Senior Directors and 50% of the Mentoring Bonus on Senior Directors 2 through Executive Directors when they advance. 18. How do I qualify for the Core Mentoring Bonus? When you develop and retain a new personal Director 2 through Senior Director, you will qualify to participate in the Core Mentoring Bonus for that month and the following month. When you develop and retain a new personal Director 3, you will qualify to participate in the Core Mentoring Bonus for that month and the following five months. Director 2 Director 3 Director 4 - Senior Director 2 Months 6 Months 2 Months 19. How will a prorated Advancement or Pacesetter Bonus affect my Mentoring or Core Mentoring Bonus? If you qualify for the Mentoring or Core Mentoring Bonus on an advancement where the Advancement or Pacesetter Bonus is prorated, your Mentoring or Core Mentoring bonus will also be prorated at the same rate. 5

6 20. If my Mentoring or Core Mentoring Bonus is prorated, can I earn the portion that was not paid? Yes. If you qualified for the Mentoring or Core Mentoring Bonus in the month of the initial payment, you will receive the remaining unpaid portion of the Mentoring or Core Mentoring Bonus when the Marketing Executive who advanced and received a prorated Advancement or Pacesetter Bonus qualifies to earn the unpaid portion of their bonus within the next 12 months. 21. What happens if the Director 2 through Senior Director I developed to qualify for the Core Mentoring Bonus falls back in Status? For you to qualify for the Core Mentoring Bonus, the Director 2 through Senior Director you developed to qualify must remain at Status or higher to maintain qualification. If your qualifying advancement falls back in Status, you would no longer qualify for the Core Mentoring Bonus. 22. Will Directors 2 through Senior Directors developed outside of the U.S. and Canada qualify me for the Core Mentoring Bonus? Directors 2 through Senior Directors developed in Mexico also meet the qualifications for the Core Mentoring Bonus. 23. When is the Core Mentoring Bonus paid? The Core Mentoring Bonus is paid in the same month the advancing Marketing Executive is paid. To receive payment, the leader must qualify for the Core Mentoring Bonus in the month of payment. 24. How can I double my Core Mentoring Bonus? When you develop and retain a second new personal Director 3 through Senior Director, you will double your Core Mentoring Bonus in that month and the following month. Both qualifying Personal Enrollee advancements must be Director 3 through Senior Director in order to double your Core Mentoring Bonus. In other words, to double your Core Mentoring Bonus, the qualifying Personal Enrollee advancements cannot include a Director 2. First Advancement CORE Second Advancement Status Director 2 Director 3 - Senior Director CORE DOUBLE CORE 6

7 25. If I help a Personal Enrollee advance more than one status in a month, how will that affect my qualifications for the Core Mentoring Bonus? As long as both qualifying advancements are to Director 3 through Senior Director, your Core Mentoring Bonus would be doubled for the current month and the following month. The first Director 3 through Senior Director advancement qualifies you for the Core Mentoring Bonus and the second Director 3 through Senior Director advancement qualifies you to double the Core Mentoring Bonus. If one of the two qualifying advancements is to Director 2, then you will be paid the Core Mentoring Bonus, but it will not be doubled. 26. If I develop two Directors 2 through Senior Director in the same month, will that double the number of months that I qualify for the Core Mentoring Bonus? Developing more than one Director 2 through Senior Director in the month will not extend the number of months you qualify for the Core Mentoring Bonus. If you develop two Directors 3 through Senior Directors in the same month, you would qualify for the Core Mentoring Bonus in that month and the following five months, and you will double the Core Mentoring Bonus in that month and the following month. 27. If I develop two Directors 4 in the same month, can I double my Core Mentoring Bonus for the current month plus three more months? Developing more than one Director 3 through Senior Director in the month will not extend the number of months you will be eligible to double the Core Mentoring Bonus. If you developed two Directors 4 in the same month, you would qualify to double the Core Mentoring Bonus in that month and the following month. 28. How do I earn the Leadership Growth Bonus, and how much will I be paid? Senior Directors and above with new customer growth of at least one (1) over a two-month period who produce a three-month average of 30 Leadership Points, and who attend the required company meetings will receive a Leadership Growth Bonus paid out based on their Commission Rate as follows. 3-Month Average Commission Rate Leadership Points Growth Bonus Senior Directors Senior Directors 9 30 $500 Executive Directors Executive Directors 9 30 $2,000 "Masters" Executive Directors Executives 9 30 $3,000 National Directors and above 30 $4,000 Required Company Meetings include: - January Business Launch - Convention - Road to Executive Director (Upon Advancement to Senior Director) - Standing Executive Leadership Conference (For Executive, National, and Corporate Directors) 7

8 29. What happens when a customer in my organization cancels after the 25 th of the month? When a customer requests to suspend their membership benefits after the 25 th of the month, that customer will continue to be considered active but not Preferred for purposes of maintaining a Marketing Executive s Status. No commissions are paid on the suspended customer and they will not receive a Backup Order. This allows the Marketing Executive to avoid surprises that would otherwise cause their Commission Rate to fall to a lower status and gives them 30 days to replace the suspended customer. A suspended customer who remains active because their suspension was processed after the 25 th of the month will not count as an active personal enrollee for a Marketing Executive to advance to a new high status. 30. How do I earn additional first-generation positions? Marketing Executives earn an additional first-generation position (in addition to the original five) for each active personally enrolled Director. In other words, the total number of firstgeneration positions a Marketing Executive can have is five, plus the number of active personal Directors. 31. How do I access my new first-generation position? When you want to access a new first-generation position, simply call Business Development at , and they can make the position available. 32. What is True PEG? True PEG (Personal Enrollee Group Volume) is the combined total Organization Volume of a Marketing Executive s Personal Enrollees in any given month counting each customer only once. 33. When is True PEG used? True PEG is only used to determine the Advancement Bonus for Marketing Executives advancing to Senior Director 2 through National Director How do I know what my True PEG is? Both Traditional PEG and True PEG are shown on your monthly Business Report. 35. How is True PEG different from Traditional PEG? True PEG and Traditional PEG are calculated by adding the Organization Volume for each Personal Enrollee in any given month. The difference is that True PEG counts each customer only once, whereas Traditional PEG may count customers who are under several Personal Enrollees more than once. 8

9 36. What is a Personal Production Account? To qualify for commissions, a Marketing Executive is required to personally produce revenue of at least 29 Product Points per month. That simply means you must designate an account as your Personal Production Account You can allow anyone to use this account to purchase their Melaleuca products. Many Marketing Executives use this account to purchase products for their own household. For you to qualify for commissions during any given month, the Customers using your Personal Production Account must purchase a total of at least 29 Product Points during that month. Your Personal Production Account can be a Preferred Customer, so those using this account may purchase products at Preferred Customer prices. Once a Marketing Executive advances to the Status of Senior Director or above, the personal production requirement increases to 70 Product Points. Persons purchasing products on your Personal Production Account must be purchasing products for their own personal consumption. In other words, they cannot be purchasing product simply to help you receive a commission. 37. How are Advancement and Pacesetter Bonuses paid to Senior, Executive, National, and Corporate Directors when advancing multiple statuses in the same month? The Organization Reorder Rate measures the percentage of Preferred Customers in a Marketing Executives organization who ordered last month who ordered again this month. Senior Directors and above who have an Organization Reorder Rate higher than 90% can be paid Advancement or Pacesetter Bonuses on an unlimited number of new statuses in any given month. Senior Directors and above who have an Organization Reorder Rate of 80% to 90% can be paid Advancement or Pacesetter Bonuses for up to two Status Advancements in a single month. Senior Directors and above who have an Organization Reorder Rate less than 80% will be paid Advancement or Pacesetter Bonuses on a maximum of one Status Advancement per month. If the number of Status Advancements a Marketing Executive achieves in a single month exceeds the number that the Marketing Executive is eligible to be paid on, the unpaid Advancement or Pacesetter Bonuses will be paid in subsequent months as long as the Marketing Executive continues to meet the requirements for Status and grows in subsequent months (excluding roll ups and organization moves). 9

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